Debit Card Fraud Decreases While EMV Adoption Increases

The Study

From 2015 to 2016, financial institutions in the US significantly increased usage of EMV enabled chip cards. During that time period it was also discovered that the fruad loss rates of debit cards were lowered by about 28 percent from the 2015 levels. This was all determined in a report PULSE Network (Discover Financial Subsidiary) recently released.

The study found that since the 2015 fraud liability shift was enacted, more and more US debit cards have been made more secure with EMV chip technology. It’s estimated to be about 80 percent of debit cards that have been converted.

According to the Vice President of Fraud and Risk Management for PULSE, Jim Lerdel, there have been quite a few measures taken by the financial services industry that have resulted in the reduction of fraud losses reported by financial institutions. He names the EMV chip card conversion, mobile commerce tokenization,and increased investment in fraud-fighting solutions as three top measures helping the cause.

Although fraud loss levels are seeing improved results, the study did reveal that fraud is still quite a large burden financially for debit card issuers. The study estimates that almost $900 million was lost in 2016 to debit card fraud.

Based on the study’s findings, 2016 showed increased usage in debit cards. Transactions where a debit card were used rose about 7 percent year-over-year. The report also found that active customers’ number of debit transactions grew 6 percent to 23.6 transactions each month.

The full results of the PULSE Network study is available here. It was performed by the independent management consulting firm, Olive Wyman and commissioned by PULSE Network. The collective information was obtained through 50 participating financial institutions.

Our Take

We knew that the fraud liability shift in 2015 would start to bring about big changes in the industry as a whole, but especially with debit card usage. This report just goes to verify our past claims.

If your business is still unable to accept chip card payments, you could be held responsible. Please contact us today to find out how you can easily and quickly accept EMV chip card transactions at your business and avoid costly penalties and fees.